|H.E. Mr. Kofi A. Annan Photo courtesy|
Rising Food Prices
The inability of families to feed themselves has been a major factor in the political instability seen in some regions of the world. In a world of volatile prices and food shortages, it will not just be repressive regimes which will feel the heat of frustration and anger. As Lester Brown wrote recently, food has become the hidden driver of world politics, with the potential to fuel conflict within countries and also between them.
The price of food is being driven by long-term pressures, which will continue to boost demand yet make increasing production to meet it difficult. The global population has just passed seven billion. The latest report from the UN Population Division warns that numbers may not stabilize at nine billion, but could reach 10 billion. At the same time, greater prosperity in developing countries will see three billion people moving up the food chain - an expanding middle class with a growing appetite for meat and dairy products. Grain once used to feed people is increasingly being switched to feeding animals. Population growth and increasing prosperity could alone lead to demand for food increasing by 70 per cent by 2050.
There are also new and linked constraints on food production which cover land, energy, water and climate. Rising oil prices, for example, have brought greater competition from heavily subsidized agro or bio-fuels. As oil prices continue to rise, the conversion of grain to fuel becomes even more attractive, no matter our grave doubts about its ethics and sustainability. Water resources are being exploited at an unsustainable pace. Lack of water is behind the two-thirds cut in grain production in Saudi Arabia in the last decade.
We cannot automatically rely on science delivering larger yields as in the past. In developed countries, we have reached a limit on the impact that innovation and technology can have on increasing cereal harvests.
To all these pressures on our food supply, we must add the catastrophic impact of climate change. In Russia last summer, higher temperatures and drought led to a 40% fall in its harvest and a damaging ban on grain exports. Some experts warn that we may still be badly under-estimating the long-term impact of climate change on yields. Combined with unsustainable farming practices, climate change is turning vast areas of productive land into dust bowls. Climate change is a terrible legacy for our children and future generations. Yet so far, our generation of leaders has failed to find the vision or courage to tackle it.
Challenges for FAO
One other important casualty of failure is the global sense of community. If countries cannot come together successfully to deliver food security - our hopes for wider international co-operation look doomed. Yet even on food, there has been an ominous retreat from the idea of a common purpose based on shared values. We have seen a worrying rise in protectionism, unilateral export bans, land grabs and exclusive deals that meet the food needs of the rich but not the poor.
But daunting as the barriers are, they are not insurmountable. We have, after all, doubled food production before. Higher food prices - ironically - might actually provide the foundation to help us build a better and fairer food future. It is not the increase in food prices which is having the most damaging impact, but the extraordinary rate at which they have risen. Indeed, while this may be controversial in some quarters, there is a strong case to be made that food prices had to be rebalanced, provided volatility is tackled and the vulnerable protected.
Food prices, aided by increased production, have been falling in real terms for much of the last three decades. While this has been good news for consumers, particularly in the developed world, it has damaged many rural communities and the long-term global supply of food.
If prices are artificially low, farmers are denied a fair return as well as the incentive and means to increase food production. This has been particularly damaging for small-holder farmers, who together with their families, still make up nearly half of the global population. In contrast, more stable higher prices can encourage investment and help communities, but only if farmers share in the benefits. So in the long-run, a fair price now can stimulate production to help meet increased demand and hold down prices in the future. But we must do more to protect the vulnerable from dangerous price volatility.
Removing additional barriers
While fairer prices can provide the launch pad, there are plenty of other barriers at national and international level which must be overcome to deliver food security. Higher food prices alone won't close the shortfall in agricultural investment in regions where we can make the biggest impact in increasing food production.
For overall there has been no shortage of investment in farming and food. It is just that most of this money is spent by wealthier countries protecting their own agricultural sector - often at the expense of farmers in the developing world. The OECD calculated that in 2009 agricultural support from richer countries to their own farmers totalled over $385 billion dollars. This, according to Oxfam, was nearly 80 times the money spent in development aid to agriculture - a figure which had fallen by over 70%, in real terms, in the previous two decades.
It is re-assuring that both national governments and international organizations understand this trend has to be reversed. We have seen countries and regional groups such as the African Union pledge to increase investment in their own agricultural sector. Richer countries have also promised, not least through the L'Aquila G-8 initiative, to make more resources available to farming in the developing world where the greatest potential to increase food production exists. These promises must be kept and involve additional funds rather than the repackaging of existing commitments.
Investment in research
We must also encourage increased investment from the private sector and open up access to credit for farmers. There must be increased investment as well in research and development. New crops and techniques, particularly in the developing world, are critical to boosting harvests and ensuring land can stay productive despite climate change. Nowhere near are enough resources being spent on the agricultural challenges of developing regions. Regrettably the research of major agri-businesses is still concentrated on the needs of large farming enterprises in the developed world. The $500 million annual budget for the CGIAR, which does such important work, continues to be dwarfed by the investment in R&D by major producers of seeds and agro-chemicals.
Investment in research must also be matched with a new flexibility in patent rights so the benefits of innovation can be shared more widely. It would be a costly tragedy, too, to ignore the importance of conserving biodiversity given its ability to help us cope with as yet unknown diseases and pests. Investment is also essential to improve infrastructure including irrigation, transport links and storage facilities. When more food is produced, we must get it to where it is needed or wanted.
There must be investment in people as well to help them adopt and adapt the new techniques. We need to do more to attract young people - with their energy and openness to new ideas - into farming and to set up agro-related enterprises in rural areas. This would also help us slow the drift to our over-crowded cities.
Africa - opportunities and challenges
There is nowhere where the legacy of past mistakes has had a more damaging impact, nor the opportunities, for the future greater than in Africa. Farmers across the continent have paid the price of this lack of investment and interest in agriculture over many decades. Cereal yields in Africa are less than a quarter of the global average - and have barely increased in 30 years.
This is not because of a lack of effort by Africa's farmers but a lack of knowledge, resources and infrastructure to support their hard work. Africa is the only continent which fails to produce enough food to feed its own citizens. A worrying situation not just because the continent already contains one third of the world's hungry but also because Africa is where the biggest growth in population will come.
But at the same time, Africa is the continent which has perhaps the greatest opportunities to help find solutions to global food insecurity. It is blessed with abundant land, containing some 60% of the world's uncultivated arable land. Even within existing cultivated land, a doubling of cereal yields would turn Africa into a major food surplus region.
Importance of smallholders
So how do we harness this potential in Africa and elsewhere and do so in ways which are sustainable? First, smallholder farmers must be at the heart of the uniquely African green revolution we need to develop. Their crucial role in providing food security has, of course, already been recognized. We can't increase food production at the speed and scale we need without mobilizing this army of small-holders. But this will only happen if we put a new emphasis on enabling them to grow food commercially and sustainably.
Subsistence-orientated farming is, of course, vital in feeding and employing poor people. We must maintain support for it, but with upgrading as the main objective. But it is by unleashing the pent up entrepreneurial spirit that we will have the biggest impact on food supplies, on jobs and incomes in both the farm and rural non-farm economy.
Role of commercial farms
Focus on small-holder farming does not mean we must turn our back on larger commercial farms. They can play a crucial role, for example, in developing Africa's agricultural potential, particularly in land-abundant countries like Zambia and Angola. But they can't operate in isolation. Nor can we sanction the kind of speculative land grabs, which have seen communities evicted in order for food to be grown, not for local people but to meet future needs in other countries.
It is very disturbing that, a recent report, found that agricultural land that adds up to the size of France was bought in Africa in 2009 alone by hedge funds and other speculators. It is neither just nor sustainable for farmland to be taken-away from communities in this way nor for food to be exported when there is hunger on the doorstep.
If, however, large commercial farms integrate their activities within the community, serving as hubs that link smallholders to value chains, sharing knowledge and best practice, they can play an important and positive role. We must continue to emphasize to agri-businesses the benefits and importance of supporting small farmers.
This is not about big versus small. It is about inclusion and ensuring all farmers have the chance to grow more food in a sustainable way. Such sustainable intensification requires access to crop varieties that perform well with relatively low levels of external inputs - and the latest techniques of soil and water management. This will need more investment in research and more support so farmers can adopt the new technologies. We must also ensure they have efficient markets for their crops - at local, regional and global levels. At the moment these markets are too often distorted or unreliable with farmers finding they are neither certain of a fair price nor profiting when prices do rise.
The FAO, its partner UN agencies and international trade bodies must step up efforts to develop a fair and sustainable framework to tackle hunger and deliver food and nutrition security. Continued slides towards the beggar thy neighbour attitude we have seen in recent years will only worsen the crisis and instability.
There is a need, too, for structural reforms such as improved social protection schemes against price spikes to protect the poorest. If global and regional food stocks were both more transparent and maintained at higher levels, price volatility and speculation would be dampened. As a first step to bring about these changes, the FAO can take the lead by compiling more accurate and accessible information on the quantity and quality of these stocks as well as developing a deeper understanding of the relationship between international, local and farm-gate prices to ensure both fairness and the right incentives are in place. This needs even greater co-operation and collaboration between the FAO and other agencies working in this area.
The survival of one billion people - the weakest and most vulnerable on the planet -depends upon us finding answers now to hunger. The future of nine billion plus people depends on putting in place the right policies and systems to deliver food security within a few decades. So, too, do our hopes for a just and peaceful world in which we work together as peoples and nations to overcome common challenges and achieve shared goals.
By H.E. Mr. Kofi A. Annan,
Chair of AGRA and Former UN Secretary General.